Overseas Workday Relief (OWR)

OWR for non-UK Business Travel

UK domiciled individuals have to file their UK tax returns on the “arising basis,” reporting worldwide income and gains. However, the remittance basis is available to UK residents that are non-UK domiciled (often called “non-doms”) which means that UK tax is paid on foreign and overseas income or gain but only if remitted (brought) to the UK.

Providing that the correct planning steps are taken, non-domiciled overseas individuals filing their UK tax returns on the remittance basis can actually legally avoid paying UK tax by claiming Overseas Workday Relief. They can avoid tax on employment earnings relating to non-UK workdays for the year that they arrive in the UK, after first becoming UK tax residents, and for at least the next two tax years.

So, for example, if your job, after relocating to the UK, results in you travelling on overseas (non-UK) business for 40% of the time, you, potentially, are taxable in the UK on just 60% of your earnings. Nevertheless, you will generally lose your Personal Allowance – being £10,600 for the 2015/16 year – if you do indeed claim Overseas Workday Relief.

Ideally, a “compliant” offshore bank account should be opened to receive your employment earnings. This helps to circumvent the complex UK tax rules which apply when remittances are made to the UK from offshore or overseas “mixed funds”.

UK Self Assessment Tax Return

Overseas Workday Relief is claimed via your UK Self Assessment Tax Return. If you are to take advantage of Overseas Workday Relief it is imperative that you keep accurate business travel records and keep all evidence of your foreign travel, such as flight tickets, in case of HMRC enquiries, as they will be required to prove your travel movements.

As had been expected, the 2018 Spring Statement update did not include any major tax policy announcements; rather it provided a number of consultations that suggest potential legislative changes in the future. Read more about the areas set for exploration here.